Technology Innovation Management Review
November 2011
Business Ecosystems as Institutions of
Participation: A Systems Perspective on
Community-Developed Platforms
Steven Muegge
architecture of Linux, the Internet, and the World Wide Web are ”
“ The
such that users pursuing their own "selfish" interests build collective
value as an automatic byproduct.... These projects can be seen to have
a natural architecture of participation... By consistent effort (as well as
economic incentives ...), it is possible to overlay such an architecture on
a system that would not normally seem to possess it..
Tim O'Reilly
Founder of O'Reilly Media and supporter of the
free software and open source movements
This article introduces a systems perspective on community-developed platforms and the
institutions that structure participation by individuals and companies. It brings together
the past research about technology platforms, company participation in business ecosystems, and individual participation in developer communities, and links these codependent subsystems through resource flows, interconnected institutional arrangements, and
shared governance. To achieve this synthesis, it draws on conceptual arguments from a
broad range of sources, including Elinor Ostrom's research program on the economics of
sustainable commons governance, Tim O'Reilly's practitioner essays about the architecture of participation, and prior management research on modularity and design, resource
dependence, and systems thinking. The resulting “systems of systems” perspective is parsimonious and insightful for entrepreneurs, managers, and community leaders.
Introduction
High-impact innovation, once thought to be the
province of corporate R&D labs, is now known to occur
in many settings outside the boundaries and exclusive
control of traditional business firms. Technology-intensive business organizations, from specialized startups to
diversified multinational enterprises, increasingly selfidentify as participants within business ecosystems, adopters and patrons of open platforms, and stewards and
promoters of innovation communities – trends wellknown to readers of the OSBR and the TIM Review.
There exists today growing bodies of knowledge about
platforms, ecosystems, and communities, but these bodies of knowledge are not well connected and have developed in different directions. Platforms research has
tended to emphasize the closed or partially-open platform architectures controlled by platform leaders such
as Apple, Microsoft, and Amazon. Business ecosystems
www.timreview.ca
research has often focused narrowly on keystone organizations, particularly the strategies by which profit-motivated platform leaders can sustain and leverage a
lucrative privileged position, and the strategies available
to firms aspiring to become platform leaders, but less is
known about ecosystems anchored around not-forprofit keystone foundations and platforms that the keystone can nurture but not control. Research on innovation communities has typically attended closely to the
mechanisms of value creation, particularly the processes of free and open source software development,
but often with less attention to and connection with adoption, commercialization, and the mechanisms of
value capture. The Apache Software Foundation, the
Linux Foundation, and the Eclipse Foundation are three
prominent examples of systems comprised of a community-developed platform, a commercial ecosystem of
for-profit companies and other organizations, and a
meritocratic developer community of individuals who
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November 2011
Business Ecosystems as Institutions of Participation
Steven Muegge
maintain and extend the platform. These components
interact and co-evolve to produce high-impact innovation. Nonetheless, much past scholarship has too often
examined platforms, communities, or ecosystems in
isolation, rather than examining the broader context in
which each of these subsystems are collectively embedded or the interactions between these subsystems.
In this article, the engine driving innovation on community-developed platforms is presented as a resource
cycle from the business ecosystem, to the developer
community, to the community-developed platform,
and back to the business ecosystem. The developer
community is the locus of value creation, the business
ecosystem is the locus of innovation commercialization
and value capture, and the platform sits between as a
shared commons resource: the outbound product of
the developer community and inbound open innovation for the economic actors of the business ecosystem.
The resource cycle of innovation is driven by institutional characteristics of the platform, community, and
ecosystem, and by keystone actions of the governance
foundation. Collectively, these multilevel institutions of
participation and keystone actions motivate participation in subsystems and resource flows between subsystems. Later sections introduce and elaborate on each of
these concepts.
the platform and ecosystem, and finally the keystone
foundation and its network of relationships with other
subsystems. Collectively, these four sections develop an
integrated systems perspective on participation, value
creation, and value capture. The sixth section discusses
the contribution of this work, emphasizing the practical
implications for various stakeholders. The seventh section concludes and looks ahead to the future. Illustrative examples throughout the article are drawn from the
author's field research on the Eclipse Foundation, platform, ecosystem, and community (Box 1), and other
systems of distributed innovation.
Platforms
A platform is a set of technological building blocks and
complementary assets that companies and individuals
can use and consume to develop complementary
products, technologies, and services. Innovators that
build on top of platforms can reuse the non-differentiating assets that are core to the platform to focus their
effort and attention on assets that will differentiate the
innovator's offer from others.
An integrated “systems of systems” perspective complements previous work in at least two ways. First, by raising the level of analysis, it joins these various bodies of
knowledge as each addressing aspects of a larger partially-decomposable system. Second, by introducing
the language and concepts of institutional theory and
prior research on the economics of commons governance, it focuses attention on aspects of the system
that are unaddressed or under-addressed by other perspectives. An elevated level of institutional analysis
provides practitioners with a common vocabulary for
effective communication and discussion with others,
and a conceptual framework for thinking clearly about
the interactions between platforms, business ecosystems, developer communities, and the polycentric governance structures that comprise a governing keystone
foundation.
The technological building blocks of a platform could in
principle take many different forms, such as electronic
hardware, schematic designs, specifications, online services, or knowledge assets, but many prominent platforms today are implemented largely in computer
software. Complementary assets increase the value of
the technological building blocks, often by decreasing
the associated costs or risks of adoption and use. For example, important complementary assets may include
the facilities for distributing platform assets, the communications infrastructure enabling user-to-user support, and a structured process for accepting new
contributions. At a 2008 talk at Carleton University
(http://timreview.ca/article/200), Eclipse Foundation Executive Director Mike Milinkovich described the Eclipse
platform as the combined base of technologies, architectures, designs, and assets used to build market offers, components, products and services, legal and
licensing frameworks, and processes which anchor economic community – a view consistent with this perspective.
This article is organized in seven sections. This first section has introduced the topic and key concepts. The
next four sections develop the “systems of systems” perspective, starting with the platform, next adding the
business ecosystem and its relationship to the platform,
then the developer community and its relationships to
Two findings from prior research on platforms are especially salient. First, we know that platforms vary widely
in level of openness, where openness is a multidimensional construct including not only the property rights
of the platform assets – that is, the rules by which others can use, modify, and redistribute the assets – but
www.timreview.ca
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Technology Innovation Management Review
November 2011
Business Ecosystems as Institutions of Participation
Steven Muegge
Box 1. The Eclipse Foundation, platform, ecosystem, and community
The illustrative examples in this article are drawn from the author's recent field research on the Eclipse
ecosystem (http://eclipse.org) – a setting likely familiar to many readers
of this journal. Eclipse Foundation
staff have been active contributors
to the OSBR, with articles by Don
Smith and Mike Milinkovich in the
inaugural issue of July 2007
(http://timreview.ca/article/94), Ian Skerrett in January 2009 (article/219),
Mike Milinkovich again in January
2010 (article/320), and Ian Skerrett
again in January 2011 (article/409). In
last month's inaugural issue of the
TIM Review, Carleton Professor Michael Weiss illustrates several concepts with a case study of Eclipse
(article/488).
The Eclipse field setting includes
all the components discussed in
this article: a community-developed platform, a business ecosystem, a developer community,
and not-for-profit keystone governance foundation. According to
the bylaws of the Eclipse Foundation (http://eclipse.org/org/documents/),
Eclipse exists “to advance the creation, evolution, promotion, and
support of the Eclipse Platform
and to cultivate both an open
source community and an ecosystem.” In the January 2010 issue of
the OSBR, Executive Director Mike
Milinkovich writes: “This duality is
built into our bylaws, our organization and, I would assert, our DNA”
(http://timreview.ca/article/320). Likewise, the characteristics of vendor
neutrality, extensibility, and accessibility are embedded into the Eclipse Foundation's legal identity.
www.timreview.ca
According to Eclipse Foundation
staff, “This really is the best of both
worlds: the openness, transparency and meritocracy of open
source with the resources and commitment of corporations both
large and small” (Smith and
Milinkovich, 2007; http://timreview.ca/
article/94).
At the time of this writing, the Eclipse Foundation comprises 174
member organizations, 1057 individual committers, and 273 projects. Eclipse software assets are
community-developed
open
source software that can be freely
obtained, used, modified, and redistributed. The Eclipse software platform is comprised of modular
extensible frameworks for building
software and a family of tools and
runtimes built on those frameworks. The most well-known Eclipse tool is the Eclipse Java IDE –
often called the dominant IDE for
software developed in the Java programming language. Eclipse is
structured to deliberately encourage companies to incorporate Eclipse software assets into their own
in-house software and commercial
products. Through well-defined extension points and application programming
interfaces
(APIs),
software developers can use Eclipse tools to create new plug-in
components to extend Eclipse
tools and frameworks in new ways.
This month, the Eclipse community celebrates its tenth birthday
(http://eclipse.org/10years)
at
EclipseCon
Europe
2011
(http://eclipsecon.org/europe2011).
The scholarly research that underpins this article was a multi-year
field study of the Eclipse Foundation, community, platform, and
ecosystem. In addition to the findings reported here, the research
also examined the origins and
meaning
of
the
ecosystem
concept, the characteristics of
each institutional structure and
their interdependencies, tensions
between participants and the management of those tensions, the motivations
for
company
participation, and the institutional
features that enable, promote, and
sustain company and individual
participation. The research design
was a nested multilevel explanatory case study that collected data
on individual participation in Eclipse open source projects, company participation in the Eclipse
ecosystem, and the interactions of
individuals and companies within
Eclipse governance structures, including the board of directors, the
foundation staff, and the crossproject governing councils. Data
sources included direct observation of participants and participant communications, extensive
archival data, and interviews with
individual participant informants
at multiple levels of analysis. The
research was multidisciplinary in
the sense of drawing on several
scholarly disciplines, including
strategic management, organization theory, institutional economics, and analogy with natural
ecology to better understand and
explain phenomena that cross traditional disciplinary boundaries.
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November 2011
Business Ecosystems as Institutions of Participation
Steven Muegge
also the processes of maintaining and extending the
platform assets. Any particular platform may be more
open in some respects and more closed in others, and
the number of possible permutations is large. Second,
we know that platforms are hubs for both value creation and value capture, and the dynamics of each of
different.
From an institutional perspective, a platform that is at
least partially open for use and adoption is a commons
resource, and participation in maintaining and extending a platform is collective action – notions useful for
linking the platform to the subsystems of value creation
and value capture. (Box 2 introduces the research behind these concepts). Conceptually, the notions of platform value creation and platform development are
closely related, as are the notions of platform value capture and the property rights for distribution and use.
On the value capture side, platforms that are widely ad-
opted by organizations and individuals can become the
anchor of what practitioners are calling “business ecosystems” – examined in the next section.
Business Ecosystems
Business ecosystems are a practitioner-driven phenomenon where organizations and individuals typically
self-identify as an ecosystem, both in their own internal
discourse and in the brand identity they convey to others. Although practitioners differ on definitions, they
generally agree that companies within a business ecosystem interact both cooperatively and competitively to
co-evolve capabilities around a platform. The scholarly
management literature has examined business ecosystems from at least four different perspectives: i) as an industry structure anchored around a technology
platform; ii) as a context conducive to open innovation;
iii) as an innovation community that extends member-
Box 2. Elinor Ostrom's research program on sustainable commons governance
Elinor Ostrom shared the 2009
Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred
Nobel (http://tinyurl.com/ygum66h) for
"analysis of economic governance,
especially the commons." Ostrom's
work challenged economic orthodoxy that collective action is rarely
sustainable and investigated the
antecedents and determinates of
successful collective action around
commons resources. A commons
(http://wikipedia.org/wiki/Commons), interpreted broadly, is a shared resource potentially subject to social
dilemmas
(http://wikipedia.org/wiki/
Social_dilemma).
In traditional economic thought,
three “classic” models of collective
action (http://wikipedia.org/wiki/Collective_action) together comprise the conventional theory of the commons:
Mancour Olson's The Logic of Collective Action (1965; http://tiny
url.com/3dfqj4f), Gareth Hardin's
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“The Tragedy of the Commons”
(1968; http://tinyurl.com/3n5f5nl), and
the Prisoners' Dilemma game of
analytic game theory (Poundstone,
1992; http://tinyurl.com/3d5apgn). All
predict that collective action cannot be sustained without strong
property rights or a coercive state.
Hardin famously writes: “Ruin is
the destination toward which all
men rush, each pursuing his own
best interest in a society that believes in the freedom of the commons. Freedom in a commons
brings ruin to all.” Ostrom argued
that although these models can be
useful in helping to conceptualize
some of the incentives in simple
situations, they have been overused as realistic models of much
more complex and dynamic situations.
Three decades of empirical studies
have found that collective action
problems can sometimes by solved
by voluntary action. These studies
have focused mainly on systems of
shared natural resources such as
groundwater basins, irrigation systems, grazing systems, fisheries,
and forests, but also urban goods
such as policing and education. In
some of these systems, resource
users did self-organize and succeed in preventing severe over-harvesting of resources they depended
on, and although these institutions
did not always succeed, neither did
private or state ownership. More
recently, Ostrom's methods have
been applied to the scholarly study
of knowledge commons, such as
software and other digital assets,
where the dilemmas threatening
sustainability are under-production and enclosure (http://wikipedia.org/wiki/Enclosure) rather than
over-utilization dilemmas of the
traditional commons.
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November 2011
Business Ecosystems as Institutions of Participation
Steven Muegge
ship to organizations as well as individuals; and iv) as
an innovation network of ties and relationships
between firms. These perspectives are complementary:
each provides a different vantage point and conceptual
lens to bring into sharp focus some aspects of the business ecosystem that are unaddressed or underaddressed by other perspectives.
An institutional perspective on business ecosystems instead emphasizes the rules, norms, and enforcement
characteristics that structure interaction and participation. Also, institutional theory provides a precise language for formally specifying the business ecosystem as
an organizational field: the set of all organizations that,
in the aggregate, constitute a recognized area of institutional life. The organizational field is a well-defined research construct in organization studies. In scholarly
social science research, organizational fields connect
organization studies to the wider macrostructures of societies and world systems.
definition. First, the notion of an organizational field
provides definitional precision and clarity, links to previous management scholarship, and reduced likelihood
of confusion between the business ecosystem and developer community construct (introduced in the next
section). Second, it explicitly identifies the platform as
the anchor point of the ecosystem and the nexus of entwined participant outcomes. Third, it replaces Moore's
language of “shared fate” with the notion of “shared
outcomes” to remove any suggestion of predetermination: outcomes are interdependent and co-evolving but
not fixed in advance. From this perspective, the Eclipse
ecosystem includes a broad set of organizations and individuals conducting business transactions with
products, services, and technologies anchored around
the Eclipse platform. Some ecosystem participants become members of the Eclipse Foundation, while others
do not. Some ecosystem members become active in the
maintenance and extension Eclipse software, while others do not.
Bringing together all of these ideas and adapting a popular definition from James Moore (2006; http://tinyurl.com/
5rtbj6u), a business ecosystem is the field of economic
actors whose individual business activities, anchored
around a platform, share in some large measure the
outcome of the whole ecosystem. This definition makes
three specific and deliberate refinements to Moore's
Activity within a field is structured by an institution –
the set of formal constraints, informal constraints, and
enforcement characteristics that structure interaction
(Box 3). Prior research on business ecosystems has had
little to say about the institutional factors associated
with participation, and this gap in our collective understanding was one of the motivations for this research.
Box 3. Institutions
An institution is a set of formal constraints, informal constraints, and
enforcement characteristics that
structures human interaction in a
way perfectly analogous to the
rules of the game in a competitive
team sport (North, 1993; http://tiny
url.com/ywppys). Some aspects of an
institution may be codified and explicit while others are tacit and are
taken for granted. Some aspects
may be unnoticed and unquestioned by participants.
One outcome of Elinor Ostrom's research program (Box 2) was the Institutional Analysis and Design
(IAD) framework, which arose from
the need to specify and compare diwww.timreview.ca
verse collective action situations.
IAD focuses attention on three
broad categories of institutional
variables: i) underlying factors of
the rules in use, attributes of the
community, and attributes of the resource; ii) the action arena of actors in an action situation; and iii)
outcomes. The earliest applications of IAD were to guide case
study research and to enable crosscase comparisons. Later applications employed IAD for meta-analysis, experimental designs in the
laboratory and in the field, mixed
method studies, agent-based simulation models, and large sample
studies. More recently, researchers
have employed IAD to study sustain-
able “knowledge commons”, including
digital
information,
libraries, and other knowledge resources.
The IAD framework was the central
organizing framework guiding data
collection and analysis for the author's research on the Eclipse field
setting (Box 1). The details of that
analysis are outside of the scope of
this introductory article, but the
key point is that the IAD framework provided a way to describe
and specify the Eclipse institutions
structuring individual and company participation.
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Business Ecosystems as Institutions of Participation
Steven Muegge
In the author's field research, companies were observed to participate in the Eclipse ecosystem in a wide
variety of different ways, and each case company participated in ways that strengthened or transformed its
business model. All of the case companies gained access to capabilities required for their business models
(Bailetti, 2009; http://timreview.ca/article/226); interestingly,
capabilities obtained from governance activities and
activities undertaken to maintain and extended the
platform were often as important as the consumption
of platform assets as inbound open innovation. Some
companies performed a portion of their R&D within the
Eclipse developer community, through some combination of employing Eclipse committers and by contributing assets to the platform. A few companies invented
new business models, anchored around Eclipse, that
would not otherwise have been viable. The direct link
between the platform and business ecosystem was one
of resource flows: consumption of platform assets by
ecosystem companies, and contribution of company assets to the platform. Equally important were indirect
links through the Eclipse developer community – the
topic of the next section.
Developer Communities
A developer community is the community of individuals, organized as a meritocracy, who collectively maintain and extend the platform. This definition is
consistent with the research on open source software
developer communities and the broader research on
community innovation. Like the business ecosystem,
the developer community operates within an institution – a developer community institution that structures the activity of individuals who maintain and
extend the community-developed platform.
Within a community meritocracy such as the the
Apache Software Foundation or the Eclipse Foundation, it is individuals, not the companies employing
those individuals, that have merit and status (Skerrett,
2009, http://timreview.ca/article/219). Organizations, of
course, may be influential within the larger system, but
their influence within the community is indirect
through the individuals that they employ. Within Eclipse, for example, commit privileges and other community roles attach to an individual rather than an
individual's employer: an individual's roles and responsibilities in the developer community do not
change if that individual changes employers or other organizational affiliations; likewise, a contributor is said
to receive no special community status from any particwww.timreview.ca
ular organizational affiliation. According to the Eclipse
development process (EDP; http://tinyurl.com/3rsaba6), the
activities to create and maintain Eclipse platform software are structured into Eclipse projects – the “main
operational unit at Eclipse” and the context in which
Eclipse software development occurs. The committers
on a project – the individuals with write access to the
project's resources and a vote in project matters – have
the exclusive authority to nominate and elect new committers to that project within the rules of the EDP. Eclipse contributors are the much larger group of
individuals who contribute code, fixes, tests, documentation, or other work to an Eclipse project, but have not
been elected as committers. Eclipse practitioners speak
also of other Eclipse communities, which are said to include organizations as well as individuals (Skerrett,
2011; http://timreview.ca/article/409). For example, there is
the community of Eclipse users and the community of
Eclipse adopters. This section focuses narrowly on the
developer community, which is comprised exclusively
of individual committers and contributors.
Three findings from prior research on developer communities are especially salient. First, we know about a
wide variety of motivations and incentives for individual participation, including career and personal development,
self-determination,
peer
recognition,
identification, self-promotion within the social structure, and belief in the inherent value of free software,
and we know that participants differ widely in their selfreported rankings of the importance of different
factors. Second, we know that many open source software developers are employed by companies to develop open source software as part of their formal job
assignment. On projects with active company involvement, interested companies may employ most or even
all active developers. Third, prior research identifies
some of the institutional factors associated with participation in developer communities. Baldwin and Clark
(2006; http://tinyurl.com/3qnf5xn), argued that the architecture of a software code base is a critical factor that lies
at the heart of the open source development process.
Employing a series of increasingly sophisticated game
theory models, Baldwin and Clark showed that increasing modularity and option value has two effects on the
software development process: it increases the incentives of developers to get involved and remain involved
in the development process, and it decreases the
amount of free riding in the equilibrium. Both effects
promote growth of the developer community. Evidence
from subsequent empirical studies has supported a
deep and positive connection between modularity and
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Steven Muegge
Figure 1. Resource cycle of participation (situating extant theory)
participation. West and O'Mahony (2008; http://tinyurl
.com/66fly95) examined twelve open source projects initiated by corporate sponsors and found that sponsors
consider three design dimensions that together create a
specific participation architecture: i) production (the
way that the community conducts production processes); ii) governance (the processes by which decisions are made within the community); and iii)
intellectual property rights (the allocation of rights to
use the community’s output). Community institutions
offering greater transparency (the ability to obtain and
use assets, and observe activities and decisions) and accessibility (the ability to change code, participate in project activity, and create derivatives) are better able to
attract external participants and grow.
Figure 1 brings together all of these ideas along with the
findings from prior sections to propose a cyclical relationship between a community-developed platform (P),
a business ecosystem (E), and a developer community
(C). The developer community and the business ecosystem are structured by institutions of rules, norms, and
www.timreview.ca
enforcement characteristics, both sharing the platform
as a commons resource, and a governance foundation
(F) that provides the functions of both community governance and an ecosystem keystone. These subsystems
are bound together though co-dependencies for resources, shared actors, and multilevel and nested interactions. (Box 4 summarizes some additional conceptual
arguments underpinning the structure depicted in Figure 1).
The engine driving innovation on community-developed platforms is a resource cycle from the platform,
to the business ecosystem, to the developer community, and back to the platform (labeled RPE, REC,
and RCP, and indicated by the thick black arrows of Figure 1). The developer community is the locus of innovation creation and platform value creation, and the
business ecosystem is the locus of innovation commercialization and platform value capture. The platform is
the outbound product of the developer community and
inbound open innovation for the economic actors of
the business ecosystem.
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Box 4. Conceptual linkages
To link these subsystems together into an integrated systems perspective, the author's research program
draws on ideas and conceptual arguments from various academic, practitioner,
and
interdisciplinary
sources.
The first source is the research program of Elinor Ostrom and her colleagues on commons governance
and institutions for collective action
(Box 2), especially the Institutional
Analysis and Design (IAD) framework (Box 3).
Second is the practitioner writing of
Tim O'Reilly on architectures of participation. In a series of essays,
presentations, and blog posts, O'Reilly argues that systems that successfully attract user contribution
possess an architecture that links
the design of the technical system
and the organization of the community of users (e.g., O'Reilly, 2004;
http://tinyurl.com/3vxstbp).
Within
such systems, users pursuing their
own selfish interest build collective
value as an automatic byproduct,
and systems get better the more
people use them.
Clark (2006) and West and O'Mahony (2008) cited previously, that
has begun to operationalize O'Reilly's arguments as the basis for a
theory of participation.
Third is the scholarly research of Professors Carliss Baldwin and Kim
Clark on design rule theory. Baldwin and Clark draw on well-established ideas in architectural design,
engineering design, and software engineering to argue that modularity
in design alters the mechanisms by
which designs can change. This enables design evolution – a valueseeking process with strong parallels to biological and ecological processes – and links architectural
design, organizational design, and
industry structure in an interconnected multilevel complex adaptive system. The design rules at each level
are reflected in the design rules of
the other two levels. This research
contributes to the small scholarly literature, along with Baldwin and
Fourth is systems thinking, a perspective on business and management that emphasizes cyclical
feedback loops, varying time delays
between actions and outcomes, and
complex interactions, rather than
the linear “event-driven thinking”
of cause and effect and of independent and dependent variables that is
more common in management theory and practice.
In research on the Eclipse field setting, the author
found that resources for the Eclipse developer community originated largely from the for-profit companies comprising the Eclipse ecosystem (REC). The most
important of these resources was the effort and attention of individual contributors paid by companies to
contribute to Eclipse projects. Individuals within the Eclipse developer community maintained and extended
the Eclipse platform through contributions (RCP): writing and testing software, creating documentation and
other resources, and other project activities. The economic actors of the business ecosystem used, extended,
and commercialized the assets of the Eclipse platform
to create and capture economic value (RPE) – and in doing so, entwined their own business outcomes with the
outcomes of the ecosystem. A second set of reciprocal
resource flows moved in the direction opposite to the
main resource cycle of production (RPC, RCE, and REP,
indicated by the thin black arrows of Figure 1). For example, the platform provided software development
tools to the developer community (RPC), the developer
www.timreview.ca
Fifth is resource dependence, a
“classic” management theory dating from the 1970s in which the survival
and
performance
of
organizations depends on the ability to acquire and maintain resources through reciprocal resource
exchange relationships with other
organizations.
community was a source for capabilities – including information, customer leads, and experienced developers
– for ecosystem companies (RCE), and some companies
within the ecosystem contributed directly to the platform by donating software that had been developed
outside of Eclipse (REP) .
Two other sets of resource flows were observed, which
are also shown in Figure 1. A third set of governance relationships connected the Eclipse Foundation to each
of the other subsystems. A fourth set of external resource flows connected each subsystem with the exogenous environment. The next section examines
governance and governance relationships.
Governance
The governance foundation in Figure 1 is at once both
an open source software foundation (Xie, 2008;
http://timreview.ca/article/194) and a business ecosystem
keystone (McPhee, 2010; http://timreview.ca/article/375).
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Prior research on developer communities and business
ecosystems has treated these roles separately, but for
community-developed platforms, they are inseparable.
In the author's research on the Eclipse field setting, the
Eclipse Foundation provided governance and services
to both the community and ecosystem, and stewardship for the platform as gatekeeper of Eclipse quality
through the project review process required for a project to declare a software release for public consumption. As noted in Box 1, recognition of these multiple
roles is explicit in Eclipse governance documents and
evident in practitioner discourse. From its member organizations, the Eclipse Foundation obtained the financial resources for operation. From the developer
community, it obtained the effort and attention of individuals who contribute to governance activities. Where
there were tensions between the community and ecosystem, the Eclipse Foundation actively managed these
tensions and harnessed them in ways that ultimately
improved the system. Keystone actions by various governance structures – for example, to promote awareness of the platform, grow the user and adopter base,
and provide services to benefit member companies –
promoted participation and resource flows.
Practitioner Implications
Systems thinking around community-developed platforms is not new. In the author's research, many references to “positive feedback loops” were observed in
Eclipse community discourse. Likewise, Eclipse Foundation staff spoke of an “Eclipse virtuous cycle”
(Milinkovich, 2008; http://timreview.ca/article/200) in which
some vendors that consume platform technology
choose to re-invest a portion of their profits back into
developing the platform in anticipation of future benefits. What is new and useful here, however, is the precision and clarity with which the constructs and
relationships are specified, the empirical grounding in
rigorous field research, and solid theoretical underpinnings that join the scholarly literatures on platforms,
communities, and business ecosystems.
This systems-level model makes at least four contributions. First, it provides a conceptual framework for
thinking clearly about distributed innovation and it
provides a vocabulary for clear communication with
others. It distinguishes explicitly between the developer
community and the business ecosystem, the different
roles that each plays in the larger system, and the differing motivations of participants. Second, it focuses atwww.timreview.ca
tention on the interactions between subsystems, not
only on the subsystems themselves. Sustainability or
growth of this system requires operation of each node
and each segment of the resource cycle between nodes.
For example, merely growing a large business ecosystem around a community-developed platform may not
be sustainable unless the institutions structuring activity and the actions of the keystone also motivate an adequate flow of resources from the ecosystem to the
developer community. Third, it clarifies the role of governance. The governance foundation of a communitydeveloped platform is both an open source foundation
and an ecosystem keystone, attending to the differing
needs of both the community and ecosystem without
benefiting one to the detriment of the other. Fourth,
there may be tensions between the participants of the
community and ecosystem, but the governance foundation can actively manage those tensions and harness
them to improve the system.
Individuals looking to contribute to a developer community and entrepreneurs looking to join an established ecosystem can use these insights to make better
informed decisions about participation. Managers of
participating companies can use these insights to make
better informed decisions about resource allocation.
Community leaders and foundation staff, and top management teams looking to launch new systems of distributed innovation, can employ these insights for
thinking clearly about effectively promoting participation.
Conclusion
Much has been written separately about platforms,
business ecosystems, and communities, without linking these subsystems together into a systems-level perspective of distributed innovation. This article has
argued that business ecosystems can be usefully understood as institutions of participation that are linked to
developer communities and community-developed
platforms through resource flows, interconnected institutional arrangements, and shared governance. It extends and contributes to a nascent stream of
management research working to develop a general
theory of participation in systems of distributed innovation.
A “systems of systems” perspective contributes to both
research and practice. For management researchers, it
provides a data collection and analysis framework for
empirical study of the institutions of company and indi-
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Technology Innovation Management Review
November 2011
Business Ecosystems as Institutions of Participation
Steven Muegge
vidual participation, theorizing about the relationships
between communities, ecosystems, platforms, and governance foundations, and comparing the institutional
arrangements of different field settings. It joins several
formerly disparate literatures and provides definitional
clarity. For practitioners, it provides an alternative perspective for thinking clearly about distributed innovation and it provides the vocabulary to clearly
communicate these thoughts with others.
Further research will seek to more clearly specify the institutional features that enable and promote company
and individual participation and motivate the resource
cycle between nodes, and to better understand the circumstances under which those arrangement are effective. The present model contributes a framework in
which to situate and interpret those results.
www.timreview.ca
About the Author
Steven Muegge is a faculty member at the Sprott
School of Business at Carleton University in Ottawa,
Canada, where he teaches within the Technology
Innovation Management (TIM) program. His
research interests include open and distributed
innovation, entrepreneurship around communitydeveloped platforms, and product development.
The ideas presented in this article were an outcome
of his doctoral research on participation in business
ecosystems.
Citation: Muegge, S. 2011. Business Ecosystems as
Institutions of Participation: A Systems Perspective on
Community-Developed Platforms. Technology
Innovation Management Review. November 2011: 4-13.
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